ICES Seminar in Experimental Economics and Game Theory
Can Competition Promote Trusting Behavior? Reciprocity and Pro-Social Behavior in Repeated Interactions
Friday, September 13, 2024 12:00 PM to 1:00 PM EDT
Vernon Smith Hall (formerly Metropolitan Building), 5183
The ICES Seminar in Experimental Economics and Game Theory of the Fall 2024 semester will feature:
University of Virginia
Abstract
This paper revisits the question of how competition might (paradoxically) promote prosocial behavior. We use a laboratory experiment to study trust and trustworthiness in dynamic games in which pairings are determined by mutual consent. Beneficial relationships can be scaled up, and unsatisfactory relationships can be terminated by the withdrawal of one of the parties. Activity constraints force subjects to choose which pairings to scale up and which ones to deactivate. Competition to be included in profitable pairings tends to produce sustained, high levels of pro-social behavior. The beneficial effects of this competition are enhanced when participants have more flexibility in terms of reallocating resources from one potential link to another.
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